Netflix Reaches Direct Access Deal With Comcast [Updated]

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[Update: Our initial take on the Netflix-Comcast agreement was called to task for implying that it would change how net neutrality would be applied to common infrastructure. As Dan Rayburn explained, the deal between Netflix and Comcast means that the two companies bypass third party distributors and move to a direct provider-to-service model. The implications this has for Net Neutrality are going to be taken up in a subsequent post]

Netflix has entered into a precedent-setting deal with Internet service provider, Comcast, to gain direct access to deliver streaming video through its network. The deal will cut out third-party transit providers and enable Netflix to more efficiently stream video to Comcast subscribers.

Netflix eats up an incredible amount of global bandwidth. In 2012, Netflix was estimated to hog a 1/3rd of traffic in North America. This number probably spike last week, when 2% of Netflix’s 33 million views binge watched their new (ultra-addicting) political thriller, House Of Cards.

“In exchange for payment, Netflix will get direct access to Comcast’s broadband network,” explains The Journal. If Netflix is indeed paying Comcast for quicker direct access, it sets an important precedent for the future of the Internet.

The deal will enable Netflix to connect with Comcast’s network directly, rather than paying third-party transit providers to offload its content.

Previously, Netflix routed traffic through CDNs and transit providers that connected with Comcast’s network at select peering points. But as Netflix traffic has increased, those peering points have become overwhelmed with its traffic.

The Comcast deal sets a precedent whereby Netflix could connect directly with other major ISPs such as Verizon and AT&T.

The Federal Communications Commission is considering how to advance new rules on open access to the Internet and pay-for-service deals between companies and Internet service providers; it’s unclear if they’ll find a way would prevent more deals like the one reportedly inked between Netflix and Comcast. Certainly, this will ramp up the political pressure to find some kind of solution to balance network congestion and open Internet access.

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Crunchbase

OverviewNetflix is an online platform that enables user to watch TV shows and movies on smart TVs, gaming consoles, PCs, Macs, mobiles, tablets, and so on. It provides its services under three segments: international streaming, domestic streaming, and domestic DVD.
The network enables members to access and view more than one billion hours of TV shows and movies per month, including Netflix original series. …

OverviewCMCSA is a type of publicly traded stocks of Comcast, a mass media and communications company that provides cable, entertainment, and communication products and services.
It is a class A common stock traded in NASDAQ. CMCSA offers voting rights of .1323 votes per share.